Re: Shinken Rust Problem
First question is whether you cut with the sword. If you do, do you return the sword to the saya after cutting without first cleaning the blade *thoroughly*? If you don't, most likely gunk has gotten in to the saya and that is notoriously hard to fix. There are long saya rasps we have, but they are god-awful expensive. And I can rasp and rasp and still not get whatever it is that is causing the problem.
Another issue (which is actually rather common) is people will overoil the blade. That this might seem to be a good thing, but what in fact happens is that when there is too much oil the oil gets left behind in the saya, rubbed in to the walls, etc. Eventually the wood will swell a bit and the saya walls begin to contact the blade in places where it shouldn't. Then when you return the blade to the saya any contamination that might be on the blade tends to get "grabbed" by the swollen area. This will cause repeated scratches and/or rust areas if whatever is caught is caustic to the blade. This can also be stuff like finger oil or most anything, even stuff floating in the air.
The bottom line is that if you put your blade back in the saya without cleaning it first, especially if you handle the steel itself or are cutting, you run the risk of contaminating the saya. If you over-oil the blade you will dramatically reduce the useful life of the saya and increase the odds of scratches, scuffs and rust.
So oil it, wrap it up in something else, put it somewhere safe, and wait a few days. If it doesn't form rust, clean it, oil it, and put it in the saya for a few more days. If it forms again you know it's the saya. If not... Clean it better. Sandpaper is okay on stuff like raptors, but will ruin the finish and should never be used on an antique or remotely correctly polished blade. Instead of sandpaper you might try just using something like Noxon. It is relatively low abrasion and has good ingredients that will neutralize stuff that causes oxidation. Just work the area gently.